Analysis of the day's national and international stories
Listener Debate
Do you think the government is correct to limit bonuses, or should bankers be rewarded for taking risks?
Read other listeners' views
George, London Why are bonuses justified in the first place ? You are paid your regular salary and your employer can expect a decent performance for that. The banks keep saying they need to retain bonuses to "retain" talent but in fact they are all hiding behind each other. If they would all stop paying bonuses this so called talent would have nowhere else to go. Besides, the question implies that bankers are rewarded for taking risks ? They are not taking any risks, they are only risking our money. As we have seen, there is no risk to them at all. Talking about "rewarding risk taking" is perverse and obscene.
Mary, Leitrim How do we come to have an untouchable elite who get 'rewarded' with amounts which the rest of us plebs could never hope to earn after using their positions to bankrupt their country?Mary
John Wilson, Darlington I was persuaded to take early retirement. My pension per annum is less than Fred Goodwin's per day; but had I the cash I could not have topped up my pot to his level. The TAX MAN would have prohibited it.
Ali Khan Oxford Up until the 80s, the most PLC Directors usually earnt inc pensions was no more than 10x that of a low level employee. This was partly due to high levels of tax. If you wanted high rewards- run your own business with attendant risks of losing it all. Now these so-called Masters of the Universe want huge rewards claiming to be Entrepreneurs without willing to suffer any risk when their incompetance ruins their Firms. When Businesses fail, even when taken over, long term employees often lose part or all of their pensions that they have paid into. The Board of HBOS were clearly negligent in awarding such generous terms to Goodwin especially as it covered only a few years of "service". UBS so far has failed to pay £70m agreed compensation to it's three sacked Directors and has instigated escrow accounts into which bonuses are paid and cannot be accessed until years later when the evidence is fully there to show whether the bonus was justified. This is because the Swiss People will be having a Referendum to decide whether failed bankers will have all their assets seized for their past incompetance. Sadly in our Democracy this is not an option. Nor will this weak Govt do so even though these Bankers either knowingly or incompetantly acted.
Peter, Lowestoft We have heard of salaries and bonuses of £1 million or more. This is obscene as it amounts to a lifetime’s pay for someone on average salary. No one, but no one, can be worth paying as much in one year as another person earns through a lifetime of hard graft.No, the bankers do NOT deserve bonuses.
Vicki Jersey Mindful that Bank employers paying low salaries to many of their employees and thus low pension credit, I would like to see bonuses being used to supplement the low salaries of bankers paid less than £30K p.a. and additionally, I would like to see any money left over being paid to investors as interest on their savings (not that I have any) but I feel sorry for those who have assets not earning any reward.
michael, Cambs Clearly Bankers of all types should not be rewarded for taking risk. They are paid to either look after money or make money. The former requires no risk. The later is inherently risky but they should be rewarded (if at all) for making money, not exposing their customers to risk. I would argue that they make money by using seed money to either save existing money in the existing economy and keeping some of the savings or they invest the seed to increase the size of the rest of the economy (production of value) and keeping some of the extra production.Alas in the recent past they seem to have found a way of appearing to make money without actually increasing the size of the real economy. Like a ponzi scheme this works fine till it's "found out" at which point it all collapses. Luckily for the investment traders, as I understand it, they are largely paid in real money and not ponzi money.Flaws in the human nature lead to an imperfect system where not to take part was perceived as a weakness and reward was de-coupled from true performance.
Sue London I do feel that there is a huge difference between a normal private company paying out bonuses when it has made a profit and a bank that would not now exist but for our taxes(i.e. their employees would have no jobs at all!) not appreciating which side its bread is buttered. Other companies in their situation are going to the wall and people face a future without pay or prospects. It is also very irritating to find the PM and the Chancellor taking the voters for such fools. The fact that they are so weak willed about stopping these bonus payments altogether in such extraordinary circumstances (legally binding when you have just been saved from closure? Hmm!) is surely more to do with their giving up all hope of winning the next election and of their desperation to secure jobs on the boards of banks (they have surrounded themselves with bankers after all) for when they are no longer in government. Voters are not mugs. I can't be alone in smelling hypocrisy - am I? As for the issue of losing good people - where will these senior execs go, with HBOS on their CVs? Where are the jobs that clamour for HBOS execs? Perhaps a complete rethink of the City reward system is needed so that bonuses are not needed at all.
Robin in Tunbridge Wells Bankers should be rewarded for doing their job - with a top salary of - say - £100k. No more. The same rule should apply to everyone.
Chris Saltmarsh, London Anyone should be rewarded if societal useful risks work well (murdering a competitor may help the risk taker, but other factors may mean society doesn't want the reward to be paid).But if you want the rewards of your risk, you could ask me before you use my money to make your bets. Use your own. And when you loose, using other people's money, don't be an arrogant idiot. The Big Boy's 'sorry' was a childish denial. They should be ashamed.
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Do you think the government is correct to limit bonuses, or should bankers be rewarded for taking risks?
George, London
Why are bonuses justified in the first place ? You are paid your regular salary and your employer can expect a decent performance for that. The banks keep saying they need to retain bonuses to "retain" talent but in fact they are all hiding behind each other. If they would all stop paying bonuses this so called talent would have nowhere else to go. Besides, the question implies that bankers are rewarded for taking risks ? They are not taking any risks, they are only risking our money. As we have seen, there is no risk to them at all. Talking about "rewarding risk taking" is perverse and obscene.
Mary, Leitrim
How do we come to have an untouchable elite who get 'rewarded' with amounts which the rest of us plebs could never hope to earn after using their positions to bankrupt their country?Mary
John Wilson, Darlington
I was persuaded to take early retirement. My pension per annum is less than Fred Goodwin's per day; but had I the cash I could not have topped up my pot to his level. The TAX MAN would have prohibited it.
Ali Khan Oxford
Up until the 80s, the most PLC Directors usually earnt inc pensions was no more than 10x that of a low level employee. This was partly due to high levels of tax. If you wanted high rewards- run your own business with attendant risks of losing it all. Now these so-called Masters of the Universe want huge rewards claiming to be Entrepreneurs without willing to suffer any risk when their incompetance ruins their Firms. When Businesses fail, even when taken over, long term employees often lose part or all of their pensions that they have paid into. The Board of HBOS were clearly negligent in awarding such generous terms to Goodwin especially as it covered only a few years of "service". UBS so far has failed to pay £70m agreed compensation to it's three sacked Directors and has instigated escrow accounts into which bonuses are paid and cannot be accessed until years later when the evidence is fully there to show whether the bonus was justified. This is because the Swiss People will be having a Referendum to decide whether failed bankers will have all their assets seized for their past incompetance. Sadly in our Democracy this is not an option. Nor will this weak Govt do so even though these Bankers either knowingly or incompetantly acted.
Peter, Lowestoft
We have heard of salaries and bonuses of £1 million or more. This is obscene as it amounts to a lifetime’s pay for someone on average salary. No one, but no one, can be worth paying as much in one year as another person earns through a lifetime of hard graft.No, the bankers do NOT deserve bonuses.
Vicki Jersey
Mindful that Bank employers paying low salaries to many of their employees and thus low pension credit, I would like to see bonuses being used to supplement the low salaries of bankers paid less than £30K p.a. and additionally, I would like to see any money left over being paid to investors as interest on their savings (not that I have any) but I feel sorry for those who have assets not earning any reward.
michael, Cambs
Clearly Bankers of all types should not be rewarded for taking risk. They are paid to either look after money or make money. The former requires no risk. The later is inherently risky but they should be rewarded (if at all) for making money, not exposing their customers to risk. I would argue that they make money by using seed money to either save existing money in the existing economy and keeping some of the savings or they invest the seed to increase the size of the rest of the economy (production of value) and keeping some of the extra production.Alas in the recent past they seem to have found a way of appearing to make money without actually increasing the size of the real economy. Like a ponzi scheme this works fine till it's "found out" at which point it all collapses. Luckily for the investment traders, as I understand it, they are largely paid in real money and not ponzi money.Flaws in the human nature lead to an imperfect system where not to take part was perceived as a weakness and reward was de-coupled from true performance.
Sue London
I do feel that there is a huge difference between a normal private company paying out bonuses when it has made a profit and a bank that would not now exist but for our taxes(i.e. their employees would have no jobs at all!) not appreciating which side its bread is buttered. Other companies in their situation are going to the wall and people face a future without pay or prospects. It is also very irritating to find the PM and the Chancellor taking the voters for such fools. The fact that they are so weak willed about stopping these bonus payments altogether in such extraordinary circumstances (legally binding when you have just been saved from closure? Hmm!) is surely more to do with their giving up all hope of winning the next election and of their desperation to secure jobs on the boards of banks (they have surrounded themselves with bankers after all) for when they are no longer in government. Voters are not mugs. I can't be alone in smelling hypocrisy - am I? As for the issue of losing good people - where will these senior execs go, with HBOS on their CVs? Where are the jobs that clamour for HBOS execs? Perhaps a complete rethink of the City reward system is needed so that bonuses are not needed at all.
Robin in Tunbridge Wells
Bankers should be rewarded for doing their job - with a top salary of - say - £100k. No more. The same rule should apply to everyone.
Chris Saltmarsh, London
Anyone should be rewarded if societal useful risks work well (murdering a competitor may help the risk taker, but other factors may mean society doesn't want the reward to be paid).But if you want the rewards of your risk, you could ask me before you use my money to make your bets. Use your own. And when you loose, using other people's money, don't be an arrogant idiot. The Big Boy's 'sorry' was a childish denial. They should be ashamed.